Branding communication: How advertising agencies transformed over this century

By Amaresh Godbole

If there’s one thing agencies are requested to do almost as often as creating communication, it’s presenting reviews. So here then, is a review of agencies in the past 15 years:

The Battleground Having used the politically correct term, I’ll promptly switch to calling it ‘advertising’. And advertising is not dead. Agencies in their erstwhile form, maybe. As the inimitable Jerry Seinfeld demonstrated at the 2014 Clio’s, it’s the job everyone loves to hate. For a while now, many have been just short of parading with ‘the end is near’ placards outside agency offices.

Long live the haters. Long live advertising. Or something like it.

What changed As long as brands exist, there is a need to place them in the consumers’ mind. But there has been a tectonic shift in the ‘how’, due to changing consumer behaviours and disruption of business, facilitated by technology. Digital transformation, customer experience design, content marketing and new media are all at the cusp of marketing and technology, shooting between the same goalposts.

What was lost Unbundling of services meant that along the way the industry lost the stature of one stop communication experts, thus leaving the door ajar for other players. Communication experts moved in house for clients as the Marcomm team and the technology revolution led to digital media giants, IT companies, consultancies and specialist shops vying with agencies, rather successfully, for a share of the CMO’s budget.

Deloitte runs a $1.5-billion digital agency.

Google, Facebook and others from Silicon Valley now have a seat at the CXO’s table. As Sir Martin Sorrell pointed out, this is a disturbing trend, considering that handing over budgets to publishers is akin to the referee and player being one and the same. This happened because agencies weren’t able to demonstrate a grasp of new media fast enough, and these companies stepped in to help train client teams.

Judging by revenue models, Facebook and Google (not Alphabet) can be viewed as advertising conglomerates, rather than the tech giants they are innocently presumed to be.

There’s also a growing trend of tech shops and content creators such as comedians and producers attempting to cut out agencies completely. To make things tougher, agencies have grappled with lower remuneration models and margin erosion over time as a result of cutthroat competition. Increasingly, the agency world has struggled to match pay-scales for talent — its primary resource against competing industries.

What was won In a case of sweet irony, agencies are vying for the CIO’s budget. In the near future CMO and CIO budgets may not be two different things. Tech companies such as Microsoft, Adobe and Oracle have formed strategic alliances with agencies to jointly address CMO and CIO requirements.

Experimentation has come full circle. As clients worked with multiple specialists, they realised the complexity of integration and unified-storytelling. This has been duly shipped back to agency land, with many evolved clients opting for a lead agency entrusted with integration and support agencies/specialists. As of date, agencies remain the best at brand storytelling.

Realising this value proposition, there is a movement towards reintegration within holding networks — they continue to run individual profits and losses, and specialisms, but are also increasingly encouraging closer collaboration amongst their racehorses. Over the last decade, agencies have also acquired skill sets such as technology, user experience and data science among others required to thrive in the new world.

The challenge has been creating the right culture for left-brain and right-brain skills to play together, and structures to get traditional foes to go into battle shoulder-to-shoulder.

Just this month, the Publicis Groupe announced its biggest ever global restructure. The astute CEO Maurice Levy went on the record to say that this move was aimed at future-proofing the company by breaking down silos to provide truly integrated services to clients. What might help is that acquisitions of new age companies have brought in young leaders — natural entrepreneurs and effective collaborators, who understand how to navigate the new seas.

There are new opportunities in the startup universe, but agencies need more flexible engagement models such as inverted funnels and stock-fee combinations to unlock potential. Digital thinking has also brought with it a willingness to experiment and a beta launch mindset which should drive innovation.

The Work

What changed If you’re still reading this, you’re amongst the few who didn’t say TL:DR and move on.

An infinite choice in content, media and crowding of brand messages has given rise to short attention spans. Technology has led to the rise of the ‘one-touch economy’, democratised innovation and media, giving a voice to everyone. Consumers today ask, “What’s in it for me?” In a buyer’s market, they have grown to expect that brands will add value to their lives beyond the products and services they offer, or at the very least, provide freebies.

A lot of this has changed in just the past five years. Three key drivers – rapid adoption of smartphones, 3G and the rise of Facebook in a short span leading the social wave. To put it in perspective, in 2010, the number of people online in India was estimated at 70 million, today the figure stands at 350 million. TV still remains the ultimate reach medium, but digital spends are now slated to be second in line.

How it affected agencies While the Nokia 3310 was topping the charts in 2000, digital marketing was just starting to become a buzzword. At the time it was a checkbox item on the brand manager and agency’s agenda and limited to websites, search, display, email, SMS and lead generation. The late 2000s was the period where ‘viral’ campaigns became a rage, seen as a godsend to advertise without spends. Some were great, but too many agencies gleefully responded to briefs saying ‘we want a viral video’ resulting in a series of failed attempts.

Today the approach is more scientific — create quality content with the right hooks, give it an initial lift with media and relevant social influencers, optimise with analytics and thus increase virality. This was also the era when several web design plus development companies, and performance marketing companies blending media, search and analytics blossomed, and many of them went on to be acquired by agency networks.

The mobile plus social avalanche post-2010 made digital a focal point for marketers, and forced brands and agencies alike to take a whole new approach. The period between 2010 and 2014 saw the rise of specialist ‘social media agencies’ and most of the successful ones were quickly bought out. Brands became publishers with a purpose — aiming to play a meaningful role in their consumer’s life. This meant addressing consumer need-gaps and giving rise to content marketing — always on content that would provide utility or value to consumers.

Agencies had to reimagine planning frameworks, craft and operations which allowed them to define brand purpose, create compelling stories in snackable formats, deliver these via paid, owned and earned platforms relevant to their consumer, maintain conversations with their consumers via social channels, all in real time.

Most agencies have built a ‘content factory’ approach which involves in house facilities, syndication, curation and co-creation with crowds and collaborators, along with amplification capabilities.

Work also became more ‘real-time’, with instant accountability for the agency, both in terms of deliveries and results. Even for pure ATL agencies, expectations of faster turn arounds increased with the digitisation of the asset creation, management and delivery process. There was a lot of initial euphoria about digital being measurable, but soon gave way to the realisation that most metrics were within the medium and didn’t tell the story of how they affected brand scores. Increasingly, the focus on measurement and analytics has shifted to attribution modelling, which allows cross medium measurement and a tie back to brand scores.

The crossroads As Digital India becomes a reality, agencies are wrapping their heads around SMACI – Social, Mobile, Analytics, Cloud and Internet-of-things, which have revolutionised brand engagement. Cocktail buys are giving way to programmatic audience buys. Agencies are faced with the reality that they are no longer the first port of call for brand innovation and won’t be until this education is complete. In the midst of this arms race, it is imperative that agencies don’t lose focus of the asset that makes it all happen — people.

In a strange twist, as businesses undergo digital transformation, agencies are increasingly competing with their own clients for talent, in addition to other creative industries such as Bollywood, media and startups which attract passionate souls. Millenials today aren’t bound by legacy, they seek flat organisations and a width of experiences — quite unlike conventional agency structures. In order to attract quality talent going forward, agencies need to provide an open, innovation-friendly environment with fluid talent models.

As we future-proof the agency business, it’s important to keep sight of the fact that people are its future.

The author is DigitasLBi’s managing director for India (Check out Firstpost’s collection on how the past 15 years transformed sports, entertainment, technology and more in F.Rewind .)